SECTION A (75 marks) Answer ALL Questions from this section. Question A1 On 1 January 2017, Alpha Group plc acquired 80% of the share capital of Beta plc at a cost of 464m. The draft balance sheets at 31 December 2017 before agreeing inter- company balances are as follows: At 31 December 2017 Beta Alpha m 469.00 61.50 462.00 464.00 Tangible non-current assets (at cost) Loan to Beta plc Investment in 80% of Beta plc at cost Inventories Cash Trade payables 10 year bank loan Loan from Alpha Group plc 190.00 30.00 -78.50 -20.00 127.00 18.00 -16.70 40.00 -55.00 495.30 1116.00 Share capital 660.00 Retained profit as at 1 January 2017 180.00 Retained profit for the year to 31 December 2017 276.00 1116.00 120.00 125.30 495.30 i) The balances on the intra-group loan account did not agree at 31 December 2017 because Alpha Group plc had not recorded a cheque for 6.5 million paid by Beta plc on 31 December 2017 in part repayment of the loan. 1.) At the date of acquisition the tangible non-current assets of Beta plc had a book value of 360m. The directors of Alpha Group plc estimated the fair value of the tangible non-current assets of Beta plc to be 410m. ill) During the year to 31 December 2017 no shares were issued by Beta plc. iv) Non-current assets of Beta plc are depreciated at 5% per year on the straight-line basis on cost or valuation. v) During the year to 31 December 2017 goods were transferred from Alpha Group plc to Beta plc. Of these goods, items transferred at 60m (inclusive of a 25% mark-up) remained in the inventory of Beta plc at 31 December 2017. IN vi) Assume that an impairment review of goodwill at 31 December 2017 leads to the identification of impairment losses of 21m for the goodwill of Beta plc. vii) All calculations should be to two decimal points. Continued on next page L... Page 2 of 7 Semester 1 - 2018/19 TIME ZONE ONE C38FR REQUIRED a) Compute each of the following account balances for Alpha Group plc as at 31 December 2017: i) Goodwill on consolidation (5 marks) ii) Tangible non-current assets (3 marks) iii) Inventory (3 marks) iv) Cash (2 marks) v) Non-controlling interest (5 marks) vi) Group reserves (4 marks) b) Produce the consolidated statement of financial position (balance sheet) for Alpha Group plc at 31 December 2017. Presentation of your answer should reflect best accounting practice as far as the information allows. (8 marks) Question A1 On 1 January 2017. Alpha Group plc acquired 80% of the share capital of Beta plc at a cost of 464m. The draft balance sheets at 31 December 2017 before agreeing inter- company balances are as follows: At 31 December 2017 Beta Em 462.00 Tangible non-current assets (at cost) Loan to Beta plc Investment in 80% of Beta plc at cost Inventories Cash Trade payables 10 year bank loan Loan from Alpha Group plc Alpha Em 469.00 61.50 464.00 190.00 30.00 -78.50 -20.00 127.00 18.00 -16.70 -40.00 -55.00 495.30 1116.00 Share capital Retained profit as at 1 January 2017 Retained profit for the year to 31 December 2017 660.00 180.00 276.00 1116.00 250.00 120.00 125.30 495.30 i) The balances on the intra-group loan account did not agree at 31 December 2017 because Alpha Group plc had not recorded a cheque for 6.5 million paid by Beta plc on 31 December 2017 in part repayment of the loan. i) At the date of acquisition the tangible non-current assets of Beta plc had a book value of 360m. The directors of Alpha Group plc estimated the fair value of the tangible non-current assets of Beta plc to be 410m. ill) During the year to 31 December 2017 no shares were issued by Beta plc. iv) Non-current assets of Beta plc are depreciated at 5% per year on the straight-line basis on cost or valuation. v) During the year to 31 December 2017 goods were transferred from Alpha Group plc to Beta plc. Of these goods, items transferred at 60m (inclusive of a 25% mark-up) remained in the inventory of Beta plc at 31 December 2017. vi) Assume that an impairment review of goodwill at 31 December 2017 leads to the identification of impairment losses of 21m for the goodwill of Beta plc. vii) All calculations should be to two decimal points. REQUIRED a) Compute each of the following account balances for Alpha Group plc as at 31 December 2017: i) Goodwill on consolidation (5 marks) ii) Tangible non-current assets (3 marks) iii) Inventory (3 marks) iv) Cash (2 marks) v) Non-controlling interest (5 marks) vi) Group reserves (4 marks) b) Produce the consolidated statement of financial position (balance sheet) for Alpha Group plc at 31 December 2017. Presentation of your answer should reflect best accounting practice as far as the information allows. (8 marks) (Total 30 marks) Continued on next page L.. SECTION A (75 marks) Answer ALL Questions from this section. Question A1 On 1 January 2017, Alpha Group plc acquired 80% of the share capital of Beta plc at a cost of 464m. The draft balance sheets at 31 December 2017 before agreeing inter- company balances are as follows: At 31 December 2017 Beta Alpha m 469.00 61.50 462.00 464.00 Tangible non-current assets (at cost) Loan to Beta plc Investment in 80% of Beta plc at cost Inventories Cash Trade payables 10 year bank loan Loan from Alpha Group plc 190.00 30.00 -78.50 -20.00 127.00 18.00 -16.70 40.00 -55.00 495.30 1116.00 Share capital 660.00 Retained profit as at 1 January 2017 180.00 Retained profit for the year to 31 December 2017 276.00 1116.00 120.00 125.30 495.30 i) The balances on the intra-group loan account did not agree at 31 December 2017 because Alpha Group plc had not recorded a cheque for 6.5 million paid by Beta plc on 31 December 2017 in part repayment of the loan. 1.) At the date of acquisition the tangible non-current assets of Beta plc had a book value of 360m. The directors of Alpha Group plc estimated the fair value of the tangible non-current assets of Beta plc to be 410m. ill) During the year to 31 December 2017 no shares were issued by Beta plc. iv) Non-current assets of Beta plc are depreciated at 5% per year on the straight-line basis on cost or valuation. v) During the year to 31 December 2017 goods were transferred from Alpha Group plc to Beta plc. Of these goods, items transferred at 60m (inclusive of a 25% mark-up) remained in the inventory of Beta plc at 31 December 2017. IN vi) Assume that an impairment review of goodwill at 31 December 2017 leads to the identification of impairment losses of 21m for the goodwill of Beta plc. vii) All calculations should be to two decimal points. Continued on next page L... Page 2 of 7 Semester 1 - 2018/19 TIME ZONE ONE C38FR REQUIRED a) Compute each of the following account balances for Alpha Group plc as at 31 December 2017: i) Goodwill on consolidation (5 marks) ii) Tangible non-current assets (3 marks) iii) Inventory (3 marks) iv) Cash (2 marks) v) Non-controlling interest (5 marks) vi) Group reserves (4 marks) b) Produce the consolidated statement of financial position (balance sheet) for Alpha Group plc at 31 December 2017. Presentation of your answer should reflect best accounting practice as far as the information allows. (8 marks) Question A1 On 1 January 2017. Alpha Group plc acquired 80% of the share capital of Beta plc at a cost of 464m. The draft balance sheets at 31 December 2017 before agreeing inter- company balances are as follows: At 31 December 2017 Beta Em 462.00 Tangible non-current assets (at cost) Loan to Beta plc Investment in 80% of Beta plc at cost Inventories Cash Trade payables 10 year bank loan Loan from Alpha Group plc Alpha Em 469.00 61.50 464.00 190.00 30.00 -78.50 -20.00 127.00 18.00 -16.70 -40.00 -55.00 495.30 1116.00 Share capital Retained profit as at 1 January 2017 Retained profit for the year to 31 December 2017 660.00 180.00 276.00 1116.00 250.00 120.00 125.30 495.30 i) The balances on the intra-group loan account did not agree at 31 December 2017 because Alpha Group plc had not recorded a cheque for 6.5 million paid by Beta plc on 31 December 2017 in part repayment of the loan. i) At the date of acquisition the tangible non-current assets of Beta plc had a book value of 360m. The directors of Alpha Group plc estimated the fair value of the tangible non-current assets of Beta plc to be 410m. ill) During the year to 31 December 2017 no shares were issued by Beta plc. iv) Non-current assets of Beta plc are depreciated at 5% per year on the straight-line basis on cost or valuation. v) During the year to 31 December 2017 goods were transferred from Alpha Group plc to Beta plc. Of these goods, items transferred at 60m (inclusive of a 25% mark-up) remained in the inventory of Beta plc at 31 December 2017. vi) Assume that an impairment review of goodwill at 31 December 2017 leads to the identification of impairment losses of 21m for the goodwill of Beta plc. vii) All calculations should be to two decimal points. REQUIRED a) Compute each of the following account balances for Alpha Group plc as at 31 December 2017: i) Goodwill on consolidation (5 marks) ii) Tangible non-current assets (3 marks) iii) Inventory (3 marks) iv) Cash (2 marks) v) Non-controlling interest (5 marks) vi) Group reserves (4 marks) b) Produce the consolidated statement of financial position (balance sheet) for Alpha Group plc at 31 December 2017. Presentation of your answer should reflect best accounting practice as far as the information allows. (8 marks) (Total 30 marks) Continued on next page L